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Call to ban phone sales sparks row

The Society of Equity Release Ad-visers has defended its call to ban telephone sales of equity release although it admits the model is used well by large firms.

The equity release advisers’ trade body submitted its response to the Financial Services Authority’s Mortgage Market Review last week.

SERA wants to see more mea-sures put in place to protect equity release customers including a ban on phone sales and an alteration to equity release permissions.

The thinking behind the ban is that face-to-face advisers can assess mental capacity and tackle con-cerns that home owners taking out equity release plans over the phone may be doing so under duress.

Simon Chalk, chairman of SERA, says the recommendations are not meant as an attack on the phone-based business model.

He says: “By definition, if that is a firm’s chosen model it has got to get it right and have robust procedures in place – large firms do this. Our comments are aimed at smaller independent brokers who sell one or two mortgages by phone and don’t get it right. We are here to promote higher standards and that is what this measure is aimed at.”

But the proposal has provoked criticism from the equity release industry.

Tim Loy, chief executive of Age Partnership, which offers phone-based equity release advice, says using this model means conversations between clients and advisers can be recorded for training and compliance purposes.

Andrea Rozario, director-general of Safe Home Income Plans, says: “In this industry we are guilty of assuming that once people get over a certain age they are incapable of making decisions. We tend to treat customers as a homogenous group which is wholly inaccurate.

“Clients want to deal with their finances in the way that is best for them. We need to develop as an industry that caters to those choices. The bottom line is that phone-based advice services wouldn’t survive if there wasn’t a need for them.”

And Dean Mirfin, group director at Key Retirement Solutions, says: “It comes down to a question of access to advice, and to limit this is prejudicial.”


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